On October 2, 2001, Rep. Charles Bass (R-NH) introduced H.R. 2985, the American Spirit Fraud Prevention Act. On the same day, Sen. Mitch McConnell (R-KY) introduced S.1484, the Crimes Against Charitable Americans Act. The American Spirit Act would authorize the Federal Trade Commission (FTC) to pursue twice the current level of civil penalties for fraudulent practices that capitalize upon "popular reaction to an emergency or major disaster declared by the President." Such activity would have to occur within a period of time on or between the date of the President's declaration and the one-year anniversary of the expiration date of the emergency period. McConnell's CACAA would make solicitations for contributions to fraudulent charities -- especially in times designated by the President as either federal disasters or emergencies -- a federal crime by amending Chapter 47 Title 18 of the United States Code, and telemarketing solicitation for fraudulent charitable purposes subject to the Telemarketing and Consumer Fraud and Abuse Prevention Act. Fraudulent charitable telemarketing offenders would also face a 10-year prison sentence for activity conducted in tandem with other federal crimes. CACAA would also require the FTC to include charitable solicitations under its rules regarding telemarketing and to share information with state and local officials to prosecute violators of those rules. Last, CACAA would increase the federal penalty against those individuals or groups soliciting or collecting donations while posing as agents of the American Red Cross from one to five years jail time in addition to restitution to those directly and indirectly harmed by such acts. (Federal protections for the American Red Cross are due mainly to its historic service to the nation in times of crises, demonstrated by its leadership in the wake of September 11.) While stronger rules and laws regarding charitable solicitations can help to reinforce public confidence in giving to relief and human services, there are concerns with both pieces of legislation. It is unclear whether the estimated $1.5 billion in annual revenue from donations to fraudulent charitable activity cited by McConnell in his October 2 press statement on S. 1484 is both a reliable figure and reflects the acts of smaller individual activity versus large-scale organized efforts. If the rationale for such scrutiny is based on an actual heightened vulnerability to the national conscience and spirit to give during times of national emergencies, it can also be argued that the propensity for fraudulent activity is persistent at all times of the year. There is also a distinction to be drawn between collection of donations and the mishandling of funds by fraudulent and legitimate charities. There may be times when legitimate charities are established quickly without coordinating their activities with recipient charities, and rules are unclear as to which activity is prohibited. While it is widely assumed that there is already federal authority to aggressively monitor and prosecute fraudulent charitable solicitations through the FTC, it currently only collects complaints against charities into the Consumer Sentinel database, a public-nonprofit collaboration since 1997, among the FTC, Australian Competition and Consumer Commission, the Better Business Bureaus, Canada's PhoneBusters, Federal Bureau of Investigation, National Association of Attorneys General, National Consumers League, US Postal Inspection Service, and the US Secret Service. Information from Consumer Sentinel, including complaints from the public, is made available only to law enforcement and regulatory bodies at the federal, state, and local levels, as well as to charity monitoring bodies. Increased authority granted to the FTC for setting out the rules under which state and local jurisdictions and regulatory actors must monitor and prosecute activities will require more consistency in the application of existing and emerging federal and state laws covering solicitations, including those dealing with electronic records and online transactions. H.R. 2985 was reported out of the House Energy and Commerce Committee on October 11 by voice vote without any amendments. S.1484 is currently in the Senate Judiciary Committee. OMB Watch will continue to monitor these bills for further developments.